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A simple quantitative example of a reflexive feedback process and the resulting price dynamics after an exogenous price shock to a financial network is presented. Furthermore, an outline of a theory that connects financial reflexivity,…
Consumer food waste, like many environmental behaviours, takes place in private, and is not directly subject to social monitoring. Nevertheless, social interactions can affect private opinions and behaviours. This paper builds an…
The increasing uptake of residential PV-battery systems is bound to significantly change demand patterns of future power systems and, consequently, their dynamic performance. In this paper, we propose a generic demand model that captures…
With negative growth in real production in many countries and debt levels which become an increasing burden on developed societies, the calls for a change in economic policy and even the monetary system become louder and increasingly…
Cooperation and competition between human players in repeated microeconomic games offer a powerful window onto social phenomena such as the establishment, breakdown and repair of trust. This offers the prospect of particular insight into…
Prior to the financial crisis mortgage securitization models increased in sophistication as did products built to insure against losses. Layers of complexity formed upon a foundation that could not support it and as the foundation crumbled…
In complex systems like financial market, risk tolerance of individuals is crucial for system resilience.The single-security price limit, designed as risk tolerance to protect investors by avoiding sharp price fluctuation, is blamed for…
Accelerated life-tests (ALTs) are used for inferring lifetime characteristics of highly reliable products. In particular, step-stress ALTs increase the stress level at which units under test are subject at certain pre-fixed times, thus…
Currency crises are frequently discussed retrospectively as a necessary and deterministic outcome of a finite sequence of fiscal decisions, monetary manoeuvres, and limited exogenous inputs. Parallelly, the Twin Deficits Hypothesis (TDH)…
This paper develops a new model of business cycles. The model is economical in that it is solved with an aggregate demand-aggregate supply diagram, and the effects of shocks and policies are obtained by comparative statics. The model builds…
This paper studies a novel stochastic compartmental model that describes the dynamics of trust in society. The population is split into three compartments representing levels of trust in society: trusters, skeptics and doubters. The focus…
The proliferation of generative models, combined with pretraining on web-scale data, raises a timely question: what happens when these models are trained on their own generated outputs? Recent investigations into model-data feedback loops…
This paper outlines a critical gap in the assessment methodology used to estimate the macroeconomic costs and benefits of climate policy. It shows that the vast majority of models used for assessing climate policy use assumptions about the…
An explanation for the political processes leading to the sudden collapse of empires and states would be useful for understanding both historical and contemporary political events. We seek a general description of state collapse spanning…
Humans must flexibly arbitrate between exploring alternatives and exploiting learned strategies, yet they frequently exhibit maladaptive persistence by continuing to execute failing strategies despite accumulating negative evidence. Here we…
Procyclicality of historical risk measure estimation means that one tends to over-estimate future risk when present realized volatility is high and vice versa under-estimate future risk when the realized volatility is low. Out of it…
A macroeconomic model based on the economic variables (i) assets, (ii) leverage (defined as debt over asset) and (iii) trust (defined as the maximum sustainable leverage) is proposed to investigate the role of credit in the dynamics of…
When it comes to studying the impacts of decision making, the research has been largely focused on examining the fairness of the decisions, the long-term effects of the decision pipelines, and utility-based perspectives considering both the…
This paper studies the opinion dynamics that result when individuals consecutively discuss a sequence of issues. Specifically, we study how individuals' self-confidence levels evolve via a reflected appraisal mechanism. Motivated by the…
In the pursuit of ever increasing efficiency and growth, our economies have evolved to remarkable degrees of complexity, with nested production processes feeding each other in order to create products of greater sophistication from less…